Business Reorganization, Bankruptcy and Creditors' Rights

Our Business Reorganization, Bankruptcy and Creditors' Rights practice is international in scope. Our attorneys play significant roles in major bankruptcy cases throughout the United States, Europe, the British West Indies, the Cayman Islands and Bermuda. We engage in matters across all industries including industrial and manufacturing, financial, retail, gaming, media, technology, oil refining, energy, transportation and real estate businesses. We also have extensive experience in cross-border insolvencies and Chapter 15 of the Bankruptcy Code.

We regularly represent:

Debtors

Creditors' committees

Indenture trustees

Acquirors of assets or claims

Plan sponsors

Lessors

Secured creditors

Debtor-in-possession lenders

Collateral and other agents

Landlords

Licensors/Licensees

Suppliers

The firm has a proven track record of success in Chapter 11 cases and related litigation as well as in out-of-court exchange offers and corporate restructurings. We also have extensive experience in real estate workouts.

Creditors' Committees

Moses & Singer frequently represents official and ad hoc creditor committees in Chapter 11 cases. We also represent individual creditors appointed to official committees and indenture trustees for public debtholders.

The firm represented the Official Creditors' Committee. After blocking a quick sale, we were instrumental in negotiating a settlement between the debtors and consignors and a global settlement with secured creditors, consignors and unsecured creditors, which benefited the unsecured creditors.

Friedman's Inc. and Crescent Jewelers

The firm represented the Official Creditors' Committee. In Friedman's, Debtors held an auction that produced a high bid that would have resulted in no recovery for unsecured creditors. After M&S threatened equitable subordination litigation against the equity holder/junior lienholder, the Committee negotiated a settlement that resulted in, among other things, the junior lender's assigning to the estate its $10 million pre-petition secured claim and its pre-petition unsecured claims totaling $20 million, which allowed a more favorable “going out of business” sale structure.

M. Fabrikant & Sons

The firm represented the Official Creditors' Committee. After the firm developed potential fraudulent transfer and equitable subordination claims against the hedge funds that acquired the secured debt of the original bank lenders, the Committee settled with those hedge funds on a plan that provides for a base recovery plus funding to pursue director and officer litigation with substantial upside. The Committee preserved fraudulent transfer and related claims against the original bank lenders which were superior to what had been previously proposed.

Thaxton Group

On behalf of the Official Committee representing subordinated noteholders, M&S pursued an adversary proceeding seeking to equitably subordinate and avoid the asserted senior secured claims of Thaxton's principal lender. The firm obtained summary judgment, subordinating its $100 million secured claim at the operating company level to the $125 million of subordinated debt at the holding company level. The firm's efforts resulted in a settlement that lead to a cash recovery of more than 90% for subordinated creditors.

RFS Ecusta Inc. and RFS US Inc.

The firm represented the Official Creditors' Committee. We identified claims against management/equity and others and negotiated a funding and sharing agreement with the principal secured creditor to fund the pursuit of such claims. The Committee forced a sale of the company, and, following the conversion of the cases to proceedings under Chapter 7, the firm was retained by the Chapter 7 trustee to pursue the claims we previously identified in the Chapter 11 proceedings. M&S recovered in excess of $15 million on those claims.

Waste Systems International, Inc.

The firm achieved a 67% cash recovery for general unsecured creditors in its representation of the Official Creditors' Committee, rejecting the Debtors' proposal for an all equity plan.

Homegold

In this Chapter 11 case, the firm negotiated an enhanced claim of 250% of the face amount of notes for the unsecured debenture holders represented by the firm as part of an agreement on a consolidated reorganization plan for three affiliated debtors. This resulted in a recovery of over 40% for noteholders in a case that paid other creditors 15% or less.

Leasing Solutions

The firm represented the Official Creditors' Committee in a case where all assets were the subject of multiple security interests. We negotiated a plan that preserved certain litigation claims for unsecured creditors. We pursued claims against secured creditor GECC seeking actual and punitive damages and settled the case for the amount of actual damages claimed, with the firm's legal fees being paid by the estate rather than the unsecured creditors.

O'Brien Environmental Energy, Inc.

For this developer and operator of co-generation facilities, the firm successfully represented the Official Creditors' Committee. At the time of the firm's retention, O'Brien's public debt was trading in the 30's. As a result of the firm efforts, a plan was confirmed, providing for creditors to be paid 100% of claims plus post-petition interest. The O'Brien case won the Turnaround Management Association's 1996 Award for best large company turnaround.

Telemundo Group

The firm represented a committee of the holders of two issues of subordinated debentures involving one of the two Spanish language television networks in the United States. As a result of the firm's efforts, a favorable agreement was negotiated resolving intercreditor disputes. The debentures represented by the firm were trading at 16 when the firm was retained, reaching near or at par by the plan confirmation date. The Company was sold 3 years later resulting in a price for the stock the subordinate creditors had received that was about 3 times its value at the time of confirmation.

Emerald Acquisition

The firm represented the sole creditor of Emerald Acquisition, the holding company for Envirodyne, in the Envirodyne bankruptcy case. The firm obtained an $11 million settlement from the principal shareholder of Emerald on its client's $30 million claim against Emerald. M&S developed and prosecuted numerous claims. Creditors of Envirodyne, who were structurally senior to our client, received no recovery.

Lomas Financial

In the first Lomas Financial case, the firm represented the interests of holders of subordinated debentures on the Official Creditors’ Committee. The firm's efforts resulted in a highly favorable settlement for debenture holders generally. The firm then commenced litigation to establish the seniority of the debenture issues we represented over other subordinated debentures, which had been considered to be paripassu. We obtained an enhanced recovery of 52% for the firm's clients. In the second Lomas Financial case, the firm represented the indenture trustee for noteholders which served as a member of the Official Creditors’ Committee. The firm represented the indenture trustee in asserting various claims relating to intercompany transfers between Lomas entities.

Forum Group

The firm represented the Official Creditors’ Committee in the Chapter 11 case. We blocked a management-proposed disposition of the Company, ousted senior management, and negotiated a plan with the secured bank lenders, which the Company, agreed to sponsor. Members of the Creditors’ Committee took control of the Company upon confirmation of the plan. The firm subsequently represented the directors of Forum in a takeover battle between the Pritzker family and an investor group including Apollo Advisors, resulting in a $137 million recapitalization of Forum.

Jamesway

In the first Jamesway Chapter 11 case, the firm successfully represented the interests of subordinated debentureholders obtaining a substantial recovery for holders that would not have been available had the absolute priority rule been applied.

Belle Casinos

The firm also represented the original holders, and the indenture trustee for holders, of $75 million of secured notes in the Belle Casinos case in Biloxi, Mississippi which has broken new ground on several issues of finance in the gaming industry. The Fifth Circuit Court of Appeals ultimately upheld the validity of ship mortgages on stationary, landlocked "floating" casinos, a position the firm had advocated in the Belle Casinos case.

Lone Star Industries

The firm represented a bank holding $40 million of claims against Lone Star and one of its subsidiaries. As a member of the Official Creditors Committee the firm persuaded the Debtor to abandon its original plans for substantive consolidation and negotiated an enhanced recovery for creditors holding claims against subsidiaries. The firm was awarded legal fees by the Court by reason of its substantial contribution to the case.

We represented three west coast municipalities in the defense of actions by Enron seeking to recover hundreds of millions of dollars with respect to long-term power supply agreements. We also represented JPMorgan Chase in actions to recover hundreds of millions of dollars wrongfully drawn by letter of credit beneficiaries when Enron's NEPCO subsidiary failed.

ATC Group

We successfully represented the principal selling shareholders in settling threatened fraudulent transfer claims of $30 million arising from the previous insolvency of ATC Group Inc. shortly after its leveraged buyout by Weiss Peck & Greer. As a result of our challenges to the confirmation of ATC Group's proposed reorganization plan, our clients were able to settle for the projected costs of defense.

Phoenix Information Systems

The firm, as special counsel to the Board of Directors of Phoenix Information Systems Inc., obtained releases of the directors from all potential claims by the Debtor, its creditors and its shareholders for alleged breaches of the federal securities laws and fiduciary duties of directors.

Healthco International, Inc.

The firm obtained a jury verdict dismissing $240 million of claims asserted by the bankruptcy trustee against the directors for breach of fiduciary duty and unjust enrichment in connection with the leveraged buy out of Healthco. The jury verdict prevented the expansion of directors’ duties toward creditors in connection with LBOs.

American Banknote

We represented the National Bank of Lithuania in litigation concerning the effect of the automatic stay on a pending international arbitration.

Financial Institution/Lender Liability Litigation

The firm is experienced in successfully representing financial institutions in complex lender liability litigation, such as in the Crothers McCall, Hunt Brothers and, Brasswell Shipyards in New York, Texas, and South Carolina, respectively.

Debtors

Our attorneys regularly represent debtors in Chapter 11 cases. The firm represented various real estate limited partnerships as debtors in New York, Texas, Florida and Tennessee as well as partners in insolvent partnerships. We represent numerous debtors in possession in a broad range of industries including:

Real Estate

530 West 26th Street LP, the lease holder for premises adjacent to the High Line

Haven Eldercare LLC, the operator of 25 nursing homes in New England

Business and Financial Services

Butler Services International Inc., a provider of outsourced employees services

Coin Phones, Inc., a private payphone company

LBS Communications, Inc., a television syndication company

Rooney Pace Group, Inc., the holding company of a securities brokerage firm

Term Industries, Inc., a lessor of automobiles, medical and other equipment

Cook United, Inc., the operator of a chain of retail department stores located principally in the Midwest

Craddock-Terry Shoe Corporation, a catalogue retailer and shoe manufacturer located in Virginia

Oneita Industries Inc., a manufacturer of activewear and infantswear located in Alabama

Automotive Industries, Inc., a public company operating a chain of retail stores selling tires and other automotive replacement parts located in Georgia

Summergrade Corporation, a manufacturer of pillows, comforters and related products

Real Estate Workouts

Commercial Real Estate

The firm regularly advises major banks and other financial institutions in loan workouts and restructurings of commercial properties in New York and throughout the United States. This has included matters such as:

Our Business Reorganization, Bankruptcy and Creditors' Rights practice is international in scope. Our attorneys play significant roles in major bankruptcy cases throughout the United States, Europe, the British West Indies, the Cayman Islands and Bermuda. We engage in matters across all industries including industrial and manufacturing, financial, retail, gaming, media, technology, oil refining, energy, transportation and real estate businesses. We also have extensive experience in cross-border insolvencies and Chapter 15 of the Bankruptcy Code.

We regularly represent:

Debtors

Creditors' committees

Indenture trustees

Acquirors of assets or claims

Plan sponsors

Lessors

Secured creditors

Debtor-in-possession lenders

Collateral and other agents

Landlords

Licensors/Licensees

Suppliers

The firm has a proven track record of success in Chapter 11 cases and related litigation as well as in out-of-court exchange offers and corporate restructurings. We also have extensive experience in real estate workouts.

With respect to litigation, our practice regularly involves:

Enforcement of creditors' rights

Defense and prosecution of preference

Fraudulent transfers

LBOs

Lender liability claims

Discharge issues

Environmental

Director fiduciary duty claims

Stay litigation concerning foreign and domestic arbitrations

Foreclosure proceedings

Creditors' Committees

Moses & Singer frequently represents official and ad hoc creditor committees in Chapter 11 cases. We also represent individual creditors appointed to official committees and indenture trustees for public debtholders.

The firm represented the Official Creditors' Committee. After blocking a quick sale, we were instrumental in negotiating a settlement between the debtors and consignors and a global settlement with secured creditors, consignors and unsecured creditors, which benefited the unsecured creditors.

Friedman's Inc. and Crescent Jewelers

The firm represented the Official Creditors' Committee. In Friedman's, Debtors held an auction that produced a high bid that would have resulted in no recovery for unsecured creditors. After M&S threatened equitable subordination litigation against the equity holder/junior lienholder, the Committee negotiated a settlement that resulted in, among other things, the junior lender's assigning to the estate its $10 million pre-petition secured claim and its pre-petition unsecured claims totaling $20 million, which allowed a more favorable “going out of business” sale structure.

M. Fabrikant & Sons

The firm represented the Official Creditors' Committee. After the firm developed potential fraudulent transfer and equitable subordination claims against the hedge funds that acquired the secured debt of the original bank lenders, the Committee settled with those hedge funds on a plan that provides for a base recovery plus funding to pursue director and officer litigation with substantial upside. The Committee preserved fraudulent transfer and related claims against the original bank lenders which were superior to what had been previously proposed.

Thaxton Group

On behalf of the Official Committee representing subordinated noteholders, M&S pursued an adversary proceeding seeking to equitably subordinate and avoid the asserted senior secured claims of Thaxton's principal lender. The firm obtained summary judgment, subordinating its $100 million secured claim at the operating company level to the $125 million of subordinated debt at the holding company level. The firm's efforts resulted in a settlement that lead to a cash recovery of more than 90% for subordinated creditors.

RFS Ecusta Inc. and RFS US Inc.

The firm represented the Official Creditors' Committee. We identified claims against management/equity and others and negotiated a funding and sharing agreement with the principal secured creditor to fund the pursuit of such claims. The Committee forced a sale of the company, and, following the conversion of the cases to proceedings under Chapter 7, the firm was retained by the Chapter 7 trustee to pursue the claims we previously identified in the Chapter 11 proceedings. M&S recovered in excess of $15 million on those claims.

Waste Systems International, Inc.

The firm achieved a 67% cash recovery for general unsecured creditors in its representation of the Official Creditors' Committee, rejecting the Debtors' proposal for an all equity plan.

Homegold

In this Chapter 11 case, the firm negotiated an enhanced claim of 250% of the face amount of notes for the unsecured debenture holders represented by the firm as part of an agreement on a consolidated reorganization plan for three affiliated debtors. This resulted in a recovery of over 40% for noteholders in a case that paid other creditors 15% or less.

Leasing Solutions

The firm represented the Official Creditors' Committee in a case where all assets were the subject of multiple security interests. We negotiated a plan that preserved certain litigation claims for unsecured creditors. We pursued claims against secured creditor GECC seeking actual and punitive damages and settled the case for the amount of actual damages claimed, with the firm's legal fees being paid by the estate rather than the unsecured creditors.

O'Brien Environmental Energy, Inc.

For this developer and operator of co-generation facilities, the firm successfully represented the Official Creditors' Committee. At the time of the firm's retention, O'Brien's public debt was trading in the 30's. As a result of the firm efforts, a plan was confirmed, providing for creditors to be paid 100% of claims plus post-petition interest. The O'Brien case won the Turnaround Management Association's 1996 Award for best large company turnaround.

Telemundo Group

The firm represented a committee of the holders of two issues of subordinated debentures involving one of the two Spanish language television networks in the United States. As a result of the firm's efforts, a favorable agreement was negotiated resolving intercreditor disputes. The debentures represented by the firm were trading at 16 when the firm was retained, reaching near or at par by the plan confirmation date. The Company was sold 3 years later resulting in a price for the stock the subordinate creditors had received that was about 3 times its value at the time of confirmation.

Emerald Acquisition

The firm represented the sole creditor of Emerald Acquisition, the holding company for Envirodyne, in the Envirodyne bankruptcy case. The firm obtained an $11 million settlement from the principal shareholder of Emerald on its client's $30 million claim against Emerald. M&S developed and prosecuted numerous claims. Creditors of Envirodyne, who were structurally senior to our client, received no recovery.

Lomas Financial

In the first Lomas Financial case, the firm represented the interests of holders of subordinated debentures on the Official Creditors’ Committee. The firm's efforts resulted in a highly favorable settlement for debenture holders generally. The firm then commenced litigation to establish the seniority of the debenture issues we represented over other subordinated debentures, which had been considered to be paripassu. We obtained an enhanced recovery of 52% for the firm's clients. In the second Lomas Financial case, the firm represented the indenture trustee for noteholders which served as a member of the Official Creditors’ Committee. The firm represented the indenture trustee in asserting various claims relating to intercompany transfers between Lomas entities.

Forum Group

The firm represented the Official Creditors’ Committee in the Chapter 11 case. We blocked a management-proposed disposition of the Company, ousted senior management, and negotiated a plan with the secured bank lenders, which the Company, agreed to sponsor. Members of the Creditors’ Committee took control of the Company upon confirmation of the plan. The firm subsequently represented the directors of Forum in a takeover battle between the Pritzker family and an investor group including Apollo Advisors, resulting in a $137 million recapitalization of Forum.

Jamesway

In the first Jamesway Chapter 11 case, the firm successfully represented the interests of subordinated debentureholders obtaining a substantial recovery for holders that would not have been available had the absolute priority rule been applied.

Belle Casinos

The firm also represented the original holders, and the indenture trustee for holders, of $75 million of secured notes in the Belle Casinos case in Biloxi, Mississippi which has broken new ground on several issues of finance in the gaming industry. The Fifth Circuit Court of Appeals ultimately upheld the validity of ship mortgages on stationary, landlocked "floating" casinos, a position the firm had advocated in the Belle Casinos case.

Lone Star Industries

The firm represented a bank holding $40 million of claims against Lone Star and one of its subsidiaries. As a member of the Official Creditors Committee the firm persuaded the Debtor to abandon its original plans for substantive consolidation and negotiated an enhanced recovery for creditors holding claims against subsidiaries. The firm was awarded legal fees by the Court by reason of its substantial contribution to the case.

We represented three west coast municipalities in the defense of actions by Enron seeking to recover hundreds of millions of dollars with respect to long-term power supply agreements. We also represented JPMorgan Chase in actions to recover hundreds of millions of dollars wrongfully drawn by letter of credit beneficiaries when Enron's NEPCO subsidiary failed.

ATC Group

We successfully represented the principal selling shareholders in settling threatened fraudulent transfer claims of $30 million arising from the previous insolvency of ATC Group Inc. shortly after its leveraged buyout by Weiss Peck & Greer. As a result of our challenges to the confirmation of ATC Group's proposed reorganization plan, our clients were able to settle for the projected costs of defense.

Phoenix Information Systems

The firm, as special counsel to the Board of Directors of Phoenix Information Systems Inc., obtained releases of the directors from all potential claims by the Debtor, its creditors and its shareholders for alleged breaches of the federal securities laws and fiduciary duties of directors.

Healthco International, Inc.

The firm obtained a jury verdict dismissing $240 million of claims asserted by the bankruptcy trustee against the directors for breach of fiduciary duty and unjust enrichment in connection with the leveraged buy out of Healthco. The jury verdict prevented the expansion of directors’ duties toward creditors in connection with LBOs.

American Banknote

We represented the National Bank of Lithuania in litigation concerning the effect of the automatic stay on a pending international arbitration.

Financial Institution/Lender Liability Litigation

The firm is experienced in successfully representing financial institutions in complex lender liability litigation, such as in the Crothers McCall, Hunt Brothers and, Brasswell Shipyards in New York, Texas, and South Carolina, respectively.

Debtors

Our attorneys regularly represent debtors in Chapter 11 cases. The firm represented various real estate limited partnerships as debtors in New York, Texas, Florida and Tennessee as well as partners in insolvent partnerships. We represent numerous debtors in possession in a broad range of industries including:

Real Estate

530 West 26th Street LP, the lease holder for premises adjacent to the High Line

Haven Eldercare LLC, the operator of 25 nursing homes in New England

Business and Financial Services

Butler Services International Inc., a provider of outsourced employees services

Coin Phones, Inc., a private payphone company

LBS Communications, Inc., a television syndication company

Rooney Pace Group, Inc., the holding company of a securities brokerage firm

Term Industries, Inc., a lessor of automobiles, medical and other equipment

Cook United, Inc., the operator of a chain of retail department stores located principally in the Midwest

Craddock-Terry Shoe Corporation, a catalogue retailer and shoe manufacturer located in Virginia

Oneita Industries Inc., a manufacturer of activewear and infantswear located in Alabama

Automotive Industries, Inc., a public company operating a chain of retail stores selling tires and other automotive replacement parts located in Georgia

Summergrade Corporation, a manufacturer of pillows, comforters and related products

Real Estate Workouts

Commercial Real Estate

The firm regularly advises major banks and other financial institutions in loan workouts and restructurings of commercial properties in New York and throughout the United States. This has included matters such as: